miércoles, enero 09, 2013

William Bates, Chief of Staff for the Council of Competitiveness
,explains that labor is no longer the primary determinant as far as cost
for big companies like Apple, which could mean bringing more
manufacturing jobs to the U.S.

sábado, enero 14, 2012

Manufacturing is now underway at Lincolnton Furniture in North Carolina.

By Sopan DebRock Center

The United States may be on the verge of bringing back manufacturing jobs from China.

Harold Sirkin, along with Michael Zinser and Douglas Hohner (all experts from the Boston Consulting Group – a leading business advising firm), says that outsourcing manufacturing to China is not as cheap as it used to be and that the United States is poised to bring back jobs from China. The three consultants first reached this conclusion in a recently published study titled “Made in America, Again: Why Manufacturing Will Return to the U.S.”

Many companies, especially in the auto and furniture industries, moved plants overseas once China opened its doors to free trade and foreign investment in the last few decades. Labor was cheaper for American companies – less than $1 per hour according to the BCG report. Today, labor costs in China have risen dramatically, and shipping and fuel costs have skyrocketed. As China’s economy has expanded, and China has built new factories all across the country, the demand for workers has risen. As a result, wages are up as new companies compete to hire the best workers.

“The tilt is now getting lower,” Sirkin says. “We think somewhere around 2015 it’ll look flat and may start to tilt in the U.S. favor at that point in time.”

By 2015, it will only be about 10 percent cheaper to manufacture in China.

“We have to recognize one thing,” Sirkin told NBC’s Harry Smith in an interview to air Monday on Rock Center with Brian Williams. “The average Chinese worker is about a quarter as productive as the average U.S. worker.”

“It’ll be a major impact. Our projections are, when you take the manufacturing jobs and then the service jobs that get created alongside those, that we will add two to three million jobs to the U.S. workforce.”

The U.S. is already seeing examples of this – starting in Lincolnton, North Carolina.

Rock Center has been following Bruce Cochrane of Lincolnton Furniture as he brings his family business back to the U.S. and re-opens the family furniture plant. Cochrane was invited to the White House last week for a forum on job creation with President Barack Obama and Vice President Joe Biden.

“Now, you don't have be a big manufacturer to insource jobs,” Obama said. “Bruce Cochrane's family had manufactured furniture in North Carolina for five generations. But in 1996, as jobs began shifting to Asia, the family sold their business, and Bruce spent time in China and Vietnam as a consultant for American furniture makers. But while he was there, he noticed something he didn't expect: their consumers actually wanted to buy things made in America. So he came home and started a new company, Lincolnton Furniture, which operates out of the old family factories. He's even re-hired many of the former workers from his family business. “

According to BCG, another manufacturer, Sleek Audio, moved production of its headphones from Chinese suppliers to a plant in Florida. Ford Motor Company is bringing back 2,000 jobs from China after striking an agreement with the United Auto Workers. Sirkin says it’s good news for the economy even though wages will be lower in those jobs than they were previously.

Sirkin believes fears that United States manufacturing is in decline are overstated and notes that the U.S. is still a manufacturing giant. In 2010, China provided 19.8 percent of global manufacturing value added. The U.S. accounted for a marginally less 19.4 percent, which, according to Boston Consulting, was “a share that has declined only slightly over the past three decades.”

Will there be a chocolate drought? World’s supply of sustainable cocoa could run out by 2014

The world faces a chocolate ‘drought’ over the next few years, an expert warned yesterday.
Political unrest in the Ivory Coast, where 40 per cent of the world’s cocoa beans are grown, has ‘significantly’ depleted the number of certified fair trade cocoa farmers.
Many have fled the West ­African country, while fair trade training programmes have also come to a halt.
Fairtrade training programmes have ground to a halt because of the danger farmers face in rural areas.
The situation is already affecting chocolate manufacturers, who are facing the highest cocoa prices for over 30 years.
Prices jumped by 10 per cent this month alone. Analysts are predicting they could soon hit $3,720 per metric tonne - a level last seen in January 1979.
It follows a curb on international cocoa exports initiated earlier this week by the country's new president, Alassane Ouattara.
Angus Kennedy, the editor of Kennedy's Confection and a leading British chocolatier, said chocolate producers are facing 'one of the biggest challenges to hit the industry in recent history'.
'Supplies of sustainable cocoa are set to run out, it's that simple,' he said.
'The Ivory Coast is a complete no-go area for cocoa traders as it's too dangerous, so training new farmers and trying to cut problems in the region is now, mostly impossible.
'So in effect, its sustainability is not sustainable. Prices can't go up as it's reported because there basically isn't enough certified cocoa left to sell.'
Of the world's 5.5 million cocoa farmers, only 10 per cent have been trained and certified as sustainable fair-trade producers.
The certification is granted by specially-trained teachers, and the course runs for up to three years.
But the political turmoil in Ivory Coast means both the farmers and trainers are fleeing the country, leaving a severe shortage of certified cocoa beans.
Even if the political situation improves, it could take three years or more for the number of certified fair-trade farmers to reach its former level.
According to Mr Kennedy, manufacturers are now fighting for the rest of the world's sustainable cocoa bean stock.
'Things could get nasty now as producers start to fight over the last stocks,' he added.

"You do not really understand something unless you can explain it to your grandmother" - Albert Einstein

"It is inaccurate to say I hate everything. I am strongly in favor of common sense, common honesty, and common decency. This makes me forever ineligible for public office" - H. L. Menken

"I swore never to be silent whenever and wherever human beings endure suffering and humiliation. We must always take sides. Neutrality helps the oppressor, never the victim. Silence encourages the tormentor, never the tormented" -Elie Wiesel

"Stay hungry, stay foolish" - Steve Jobs

"If you put the federal government in charge of the Sahara Desert , in five years ther'ed be a shortage of sand" - Milton Friedman

"The tragedy of modern man is not that he knows less and less about the meaning of his own life, but that it bothers him less and less" - Vaclav Havel